CEMEX counts costs as 1Q18 earnings fall

CEMEX reported consolidated cement volumes of 16.1 million t in 1Q18, a 1.3% increase on the same period in 2017. Revenues were up as result at US$3.4 billion, an 8% increased on the previous year (2% on a like-for-like basis).

The increase in sales was due to higher prices in Mexico, the US, Europe, and Asia, Middle East and Africa regions, as well as higher volumes in the US and Asia, Middle East and Africa regions.

“The first quarter of 2018 was characterised by solid operating results with good consolidated daily volumes and improved pricing performance,” said Fernando A. Gonzalez, CEO of CEMEX, in a statement.

Higher revenues were offset by higher costs, mainly related to distribution expenses and higher energy costs. This hit operating earnings, which fell 4% to US$535 million (6% on a like-for-like basis).

Seasonal effects, including adverse weather in Europe and the US, fewer business days, and an “inventory costing-variation”, also drove earnings generation lower, Gonzalez added. Like-for-like earnings were down most regions except Mexico, where operating EBITDA rose 10% to US$299 million.

“For the rest of 2018, we expect favourable consolidated volumes and improving pricing dynamics in most of our markets,” added Gonzalez. “Together with an expected moderation in our energy cost increases and our initiatives to contain other costs, this should translate into increased operating EBITDA generation for the full year.”